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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Vistra Corp. In Focus
Headquartered in Irving, Vistra Corp. (VST - Free Report) is a Utilities stock that has seen a price change of -5.49% so far this year. The company is paying out a dividend of $0.18 per share at the moment, with a dividend yield of 3.42% compared to the Utility - Electric Power industry's yield of 3.53% and the S&P 500's yield of 1.81%.
Looking at dividend growth, the company's current annualized dividend of $0.74 is up 23.3% from last year. In the past five-year period, Vistra Corp. has increased its dividend 4 times on a year-over-year basis for an average annual increase of 11.62%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Vistra Corp.'s payout ratio is 24%, which means it paid out 24% of its trailing 12-month EPS as dividend.
VST is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $1.02 per share, which represents a year-over-year growth rate of 138.64%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that VST is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Vistra Corp. (VST) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Vistra Corp. In Focus
Headquartered in Irving, Vistra Corp. (VST - Free Report) is a Utilities stock that has seen a price change of -5.49% so far this year. The company is paying out a dividend of $0.18 per share at the moment, with a dividend yield of 3.42% compared to the Utility - Electric Power industry's yield of 3.53% and the S&P 500's yield of 1.81%.
Looking at dividend growth, the company's current annualized dividend of $0.74 is up 23.3% from last year. In the past five-year period, Vistra Corp. has increased its dividend 4 times on a year-over-year basis for an average annual increase of 11.62%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Vistra Corp.'s payout ratio is 24%, which means it paid out 24% of its trailing 12-month EPS as dividend.
VST is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $1.02 per share, which represents a year-over-year growth rate of 138.64%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that VST is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).